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The American Airlines And US Airways Merger

Merging American Airlines and US Airways. What will it mean for you? For air travel?

U.S. Airways and American Airlines planes are shown at gates at DFW International Airport. The two airlines will merge forming the world's largest airlines. (LM Otero/AP)

U.S. Airways and American Airlines planes are shown at gates at DFW International Airport. The two airlines will merge forming the world’s largest airlines. (LM Otero/AP)

Can you remember the last time you flew when the plane wasn’t full? The knee-room wasn’t squished? The baggage charges didn’t make you groan? Well, flying in America just took another turn.

American Airlines and US Airways announcing their giant merger to make the biggest air carrier in the world. The latest merger in a string that has snuffed out TWA, Northwest, Continental, Air Tran, ATA, ValuJet to leave just three majors plus Southwest flying at full scale. What does that mean for you?

This hour, On Point: Flying in the age of fewer, bigger airlines.

-Tom Ashbrook

Guests

Ben Mutzabaugh, USA Today aviation editor and editor of the “Today in the Sky” blog. (@TodayInTheSky)

Charlie Leocha, director of the Consumer Travel Alliance. (@Leocha)

Mary Schlangenstein, airline reporter for Bloomberg News.

From Tom’s Reading List

Huffington Post “After months of courting, the companies on Thursday announced an $11 billion merger that will turn American into the world’s biggest airline, with 6,700 daily flights and annual revenue of roughly $40 billion. It’s a coup for Parker, who runs the much-smaller US Airways Group Inc. and believes that mergers help airlines achieve higher revenue and consistent profits.”

Airchive “Several airline mergers have taken place during the last 12 years, but the American Airlines and US Airways merger is like no other. American and US Airways will become the world’s largest airline once the marriage certificate is signed, and their marriage signifies the final major U.S. airline merger for years to come. Did I mention that the merger is taking place on Valentine’s Day? The airline industry is a tough industry, and American Airlines and US Airways are combining histories filled with mergers, bankruptcy filings, and labor issues. There is one question on everybody’s mind. Will the American Airlines and US Airways be a marriage made in Heaven or Hell?”

USA Today “The boards of US Airways and American parent AMR have voted to merge. The deal still has some hurdles to clear, but the deal would bring big changes to many U.S. travelers if it closes.”

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  • Shag_Wevera

    Higher prices and fewer direct flights is the result as I’ve heard it.  Why does it seem that everything is getting worse?  Can’t make a decent wage, can’t retire, can’t have reasonable discourse in government, gas back at 4 bucks…  Maybe the Buddhists have it right.  Desire is the basis of all suffering.  Oh well. live simply and hang on for Nirvanna I guess.

  • LinRP

    Here come the monopolies again. History is repeating itself right under our noses, out in the open, and widely covered by media. What will ever stop all this madness????

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      …with the exception that monopolies used to be regulated as monopolies. Now we pretend there’s competition.

  • J__o__h__n

    Like all mergers, this is obviously going to result in lower prices and better service for the consumers.  Enjoy the synergy!

  • Fiscally_Responsible

    Given how much air travel contributes to greenhouse gases on a comparable basis to ground travel and how much money the airlines have lost over the years due to the poor business model, I am all for the higher ticket prices that are likely to result from this and other airline mergers.  Those who seriously believe in man-induced climate change should be strong advocates of carbon taxes/etc. that really jack up airline ticket prices in order to discourage air travel.  That will result in fewer flights and the need for mergers as often occurs in declining industries.

  • DrewInGeorgia

    Also just read about Office Depot and Office Max. Sure the Paper Clips will cost less when there’s only one company supplying them.

    Whatever happened to Anti-Trust Law?

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    The only thing that ever benefited consumers were lots of little airlines offering tickets that eventually either priced themselves out of business or made them targets  for buyouts and takeovers.

    We’re moving back to more like it was back in the 60′s – few choices and no incentives for airlines to cut ticket prices. Maybe they’ll complete the circle and rename themselves TWA.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Capitalism is a lot like the movie Highlander. “There can be only one”.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    If there is no cheap option lowering the floor on prices, it’s more profitable for an industry to apply uniform high prices.

  • http://twitter.com/glwinston Gordon Winston

    I ask why does our government continue to allow large companies to merge? I do understand that merging makes companies more efficient allowing prices to be more competitive. However as we all know (ie auto industry) that when companies get too big to fail then the government steps saying, “these companies are too big to fail so we MUST bail them out”. My wallet is tired of bailing out large companies while CEO’s make mega millions. 

    • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

      Your large company executive/investor today is your congressman tomorrow. And vice versa.

      • http://twitter.com/glwinston Gordon Winston

        True maybe that’s the problem. Our congressmen are supposed to represent the people. I don’t think that the majority of the public feels we should be financially raped to make a few wealthy. 

        • WBC_in_MA

          We have the best government that money can buy!  I’d laugh, but this is too often true. 

  • John Roberts

    This merger is more about fixing a problem than improving air travel. Seat sales for leisure travelers will always soak-up excess capacity at competitive prices while business travelers foot the bill.
    Anyone remember People’s Express? That was innovation a decade ahead of it’s time. But look what happened to them.

  • BHA_in_Vermont

    What percentage of the other 30% are NOT under contract with the big (soon to be) 4? 

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    The bottom line – we’re going back to the days where only the well off people fly. And the rest of us don’t.

  • WBC_in_MA

    You listed a few hubs that this merger would control more than 60% of the flights.  If this merger takes place (and I hope not), then the resulting company should be forced to sell off flight slots to get them under the 40% mark of any hub.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    The fee structure is almost bewildering in its screwedupedness.

    We’re approaching Ticketmaster, or bank holdup (the bank holds you up) territory.

    • http://twitter.com/glwinston Gordon Winston

      Wait till they start charging passengers by the pound per mile. 

    • WBC_in_MA

      We need to have full disclosure of all fees, and this needs to be passed on to all of the travel agencies and online reservation websites.  However, IF we had true competition, then there would be fewer fees in general.  This merger, and the several other mergers in the airline industry has been a disaster for the consumer.

  • BHA_in_Vermont

    It would be nice if I were 5’6″ and didn’t have to worry about losing my knees in the “non upgrade” seats.

    Of course, it would also be nice if the seats were as wide as my shoulders rather than my hiney. Got REALLY lucky last month traveling cross country. Small stature daughter on one side and no broad shouldered (or broad waisted) person on the other.

    Yeah, I know, the seats in 1st Class are wider backed. But my wallet isn’t that wide ;)

  • DrewInGeorgia

    Did I miss the part of the show where Administration and Administrative pay were discussed?

  • http://profile.yahoo.com/XXNU3OVVE7IISA7SP5TIZQGTJU Juan

    I can remember Jack Kemp back in the late 80′s extolling the competitive virtues of airline deregulation “less regulation more airlines.”  Looks like he spoke too soon.

    • http://pulse.yahoo.com/_F7INJQ36ICKTEHLWPYXBP6Z6UE Walter F

      Airline deregulation was one of the worse actions taken with regard to the flying public.

  • Steve__T

    I tried to get a flight to LA from NC. I had a choice of holdover  places and hours of holdover. Georgia or Nevada. The Las Vegas holdover was a cheaper flight the longer your holdover. Naturally I knew what and who was behind this. I just couldn’t figure out how they got away with it.

  • http://profile.yahoo.com/GFH32KUJLKU6J7T2SIHBLZKSXA Aina

    I don’t understand why we’ve come to believe flying is a right and not a privilege.  Of course the flights are going to be fewer and fuller, because until the irresponsible flight practices of airlines caught up with them and they have been operating under the principle that resources like gas and space are endless, which is in line with the American mindset that would rather drive than walk to a store 1 mile away, or even more ludicrously, building block store plazas that encourage lazy consumers to drive from one store to another rather than walk.

    We’ve trained ourselves to move freely and leave where we grow up under the impression that travel is cheap and we can always go home for a dime.  Travel is only cheap when resources are abundant or at least perceived so.  Maybe travel is a luxury and we’ve forgotten that?  We would do better to think of air travel like trains or buses, where we are carpooling in order to save money, but have no expectations that the ride is going to be plush!

    • http://pulse.yahoo.com/_F7INJQ36ICKTEHLWPYXBP6Z6UE Walter F

      There are people who must travel long distances for business and family reasons so the assertion that air travel is a privilege is very narrowly focused.

  • BHA_in_Vermont

     We can’t even fly from Burlington, VT to Boston any more without going through a hub.  It is 3.5 hours driving, 220 miles.

    You have to get to the airport an hour before your flight, then fly to NYC then to Boston. Shortest flight time is on Jet Blue: 3 hours 11 minutes, add the pre-flight 1 hour and it is 4 hours 11 minutes.

    The round trip cost on JB is $480. That much money buys 125 gallons of gasoline @$3.85/gallon. Even if I took a gas pig Hummer 2, it would take less than 100 gallons round trip, you can take several people for no extra cost and there is no baggage charge.

    FWIW, I can make that round trip 14 times in my car with 125 gallons of gas.

    • jefe68

      Why would you fly from Burlington to Boston?
      Unless you have money to burn.

  • Cathy Schwemm

    For several years I’ve flown US Air through Phoenix, for a while as often as 4-6 times/month. The service was great, no cancellations, and mileage benefits that made flying actually enjoyable. I REALLY hope that doesn’t change, but I’m not optimistic…

  • http://profiles.google.com/becca.riding Rebecca Riding

    The truth is, air travel is simply going to be out of reach for many Americans soon. The airlines have cut their customer service to nothing, while raising their prices to a point where driving is looking like the only option for many families. My question is–what is that tipping point, and will they know when they’ve reached it?

  • jefe68

    “Will the American Airlines and US Airways be a marriage made in Heaven or Hell?”

    More like a kind of purgatory or the nine circles of hell perhaps.

  • Regular_Listener

    So which is it – are airfares higher or lower than they used to be?  I don’t have any statistics handy, but I suspect that prices were high in the 1960s, dropped in the 1980s, and stayed low for a while, and have since been going back up.  The golden era of cheap air travel may be behind us already.  I remember going to France for something like $430 round trip in 2000!  Even considering inflation, you couldn’t get anything close to that today.  Of course I understand that a lot of this is being driven by fuel costs.

    As for the merger, I left the broadcast without much of an opinion about it.  If one of the airlines is bankrupt, and their routes don’t overlap, then why not allow them to merge?  But there was so much contradictory information spewed out by the guests on this show that it is hard to know what to believe about it.

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